A lot of us begin to think about life insurance when we have children. Here we help you decide what policy best suits your family.
Everything changes when we have children. It is a beautiful moment, full of love and new experiences, but it also brings new concerns and worries. This is normal; as mothers and fathers, we learn step by step along the way. It is to be expected that when we have children, we are more concerned about our family’s future. How will we pay for their education? What will happen to them if one day we are no longer here?
If you are thinking of acquiring life insurance in this new phase (as a mother or a father), you are not alone. It is a very wise and prudent decision, even though you may have some questions concerning this process. Below we share some information about the two main types of policies, term and universal, so you can make the best choice according to your life plans and budget.
Term Life Policy
You can choose the amount of the benefit and the length of the term.
This type of policy allows you to specify the benefit amount that you wish your beneficiaries to receive and the amount of years you want them to be protected (for example, $500,000 for 30 years). These policies can be very convenient and affordable. The premiums for this type of insurance are low, compared to those of whole life insurances. For example, if you are a young parent with small children, you could acquire a policy that will cover you for a sufficient number of years until your children become professional adults capable of providing for themselves. In a case like this, if you should die during the term of the policy, your chosen beneficiaries will receive their corresponding benefits directly.
Likewise, if you have just bought a home for your family, a Term Life Policy is a good way to protect that investment. In such a case, you could acquire an insurance policy that will cover you for the necessary period of time until you pay off your debt. In this manner, if you should die during the term of the policy, the insurance can be used to cover that debt and your heirs will not have to worry about it.
As the name suggests, this type of insurance has an expiration date. When this date arrives, you can let the policy expire, renew it, or convert it to a Universal Life Insurance Policy. This other kind of insurance has some attributes and benefits that might be better suited for you, according to your plans and needs.
Universal Life Policy
An insurance policy that covers you for life.
A Universal Life Policy is a whole life insurance. Contrary to the Term Life Policy, which has a specific expiration date, this insurance policy provides coverage throughout your life, as long as you pay the premiums. The Triple-S Vida Universal Policy has a flexible premium and coverage. After the first year, you have the option of changing the premium payment amount and the coverage amount, as the circumstances in your life change. For example, if you have a second child, you can opt to increase the coverage. Likewise, if your children are of legal age and can support themselves, you can opt to reduce it. It all depends on your long-term plans.
An important component that is offered by the Universal Life Policy that is not offered by the Term Life Policy is that it also allows you to save for the future. As time passes, a universal policy accumulates securities. In the future, you have the option to make partial withdrawals of these accumulated securities, or you can use them as collateral for a guaranteed loan. For example, the accrued securities can help complement your savings for the future.
If you have any questions about the types of life insurance policies and which is the right one for you, Triple-S Vida is here to help. Learn more about our products at sssvida.com or call us at (787) 771-1862.